488-500 Upper Wellington Nominee Inc. v Hamilton (City), 2024 CanLII 109291

Ontario Land Tribunal

Tribunal ontarien de l’aménagement du territoire

ISSUE DATE: November 01, 2024

CASE NO(S).: OLT-23-000811

PROCEEDING COMMENCED UNDER subsection 42(10) of the Planning Act, R.S.O. 1990, c. P.13, as amended

Applicant and Appellant: 488-500 Upper Wellington Nominee Inc.

Subject: Cash-in-Lieu

Description: Protest of Fee of Parkland Contribution Cash-in-Lieu

Property Address: 488-500 Upper Wellington Street

Municipality/UT: City of Hamilton

OLT Case No.: OLT-23-000811

OLT Lead Case No.: OLT-23-000811

OLT Case Name: 488-500 Upper Wellington Nominee Inc. v Hamilton (City)

Heard: March 26-28, 2024 by Video Hearing

APPEARANCES:

Parties	Counsel
488-500 Upper Wellington Nominee Inc.	Jason Park Sarah Kagan
City of Hamilton	Peter Krysiak

DECISION DELIVERED BY S. BOBKA AND BITA M. RAJAEE AND ORDER OF THE TRIBUNAL

Link to the Order

INTRODUCTION

1This was a Hearing of the Merits regarding an appeal pursuant to section 42(10) of the Planning Act (“Act”) by 488-500 Upper Wellington Nominee Inc. (“Applicant”) of the decision of the City of Hamilton (“City”) with respect to the amount required for the cash-in-lieu (“CIL”) fee contribution for parkland (“Parkland Fee”) paid under protest by the Applicant for the development proposal located at 488-500 Upper Wellington Street (“Subject Property”).

2The Applicant’s position is that the More Homes Built Faster Act, 2022 (“Bill 23”), came into force and effect on November 28, 2022, and introduced changes to how Parkland Fees are calculated, which should be applied to the development proposal on the Subject Property. Bill 23 introduced a cap to the amount of Parkland Fees required unless “a building permit has been issued in respect of the development or redevelopment” prior to the date the Bill came into force and effect. The Applicant argued that the demolition permits (issued in January and May 2022) are not building permits meeting the definition of ‘in respect of the development or redevelopment’. It was their position that the first building permit to meet either definition was the foundation permit (issued in July 2023). As this date was after Bill 23 came into force and effect, the Applicant maintained that the cap to the Parkland Fee should apply.

3The City’s position is that building permits for demolition are building permits ‘in respect of the development or redevelopment’ and that two were issued on January 26, 2022, and May 9, 2022, respectively. As these dates were before November 28, 2022, the City argued that the cap should not apply.

4The following were marked as Exhibits:

Exhibit 1 – Applicant’s Witness Statement Compendium Feb 9 2024 Exhibit 2 – City’s Witness Statement of Michael Fiorino Exhibit 3 – City’s Witness Statement of Gillian Robinson Exhibit 4 – Joint Document Book Exhibit 5 – Excerpt of s. 41 of the Planning Act Exhibit 6 – Agreed Statement of Facts

BACKGROUND AND HISTORY OF THE APPLICATION

5The Subject Property originally contained two buildings, a 790 square metre (“m²”) one-storey commercial building and a 1020 m² one-storey commercial building which were proposed to be, and have now been, demolished.

6The proposal is for a six-storey mixed-use building with 256 residential dwelling units and commercial uses on the ground floor.

7The following key dates were agreed to by the Witnesses in the Agreed Statement of Facts or in their testimony:

May 11, 2021 Application for Formal Consultation (FC-21-102) for demolition & construction of building submitted by the Applicant to the City

November 1, 2021 Application for Site Plan Control (DA-22-001) submitted by the Applicant to the City

December 21, 2021 City issued Conditional Site Plan Approval (DA-22-001)

January 26, 2022 City issued a demolition permit (Permit No. 21 133794 00 DP) to the Applicant to demolish a 790 m², 1-storey commercial building as shown on the Site Plan

May 9, 2022 City issued a demolition permit (Permit No. 21 164677 00 DP) to the Applicant to demolish a 1020 m², 1-storey commercial building as shown on the Site Plan

May 26, 2022 Committee of Adjustment Notice of Decision granting ten minor variances (HM/A-22:78)

November 28, 2022 Bill 23 came into force and effect

May 10, 2023 City issued a building permit (Permit No. 23 111360 00 R3) to the Applicant for a vertical closed loop geothermal system

July 26, 2023 City issued Final Site Plan Control Approval letter

July 28, 2023 Applicant submitted the fee payment for Cash-in-Lieu of Parkland Dedication, Community Benefits Charges, Public Education Development Charges, and Catholic Education Development Charges under protest

July 28, 2023 City issued a conditional building permit (Permit No. 23 111359 00 R3) to the Applicant to construct foundation only

October 13, 2023 City issued a building permit (Permit No. 22 150387 00 R3) to construct apartment building

[Emphasis added by Tribunal]

ISSUES BEFORE THE TRIBUNAL

8Bill 23 amended the Act by reducing or establishing maximums for parkland dedication requirements. In this case, the Tribunal must determine whether the parkland cap in s. 42(3.3)(a) of the Act applies to the proposed development. To do this, the Tribunal looks to the transition provision in s. 42(3.5) which states that the cap does not apply if “a building permit has been issued in respect of the development or redevelopment” prior to the date that Bill 23 comes into force (that being November 28, 2022).

9The Tribunal must determine whether the demolition permits are considered building permits in respect of the development or redevelopment.

10The Applicant submitted the uncapped fee payment under protest, to the City, on July 28, 2023. If the Tribunal finds that the cap applies, the amount of refund owing is not in dispute. The Parties agreed that the value of the CIL of parkland dedication without the caps would be $2,262,016 and the value of the CIL of parkland dedication with the caps would be $670,000. It follows that, if applicable, the refund owed to the Applicant would be $1,592,016 plus interest (the rate of which is to be determined by the Tribunal).

BILL 150 DISCUSSION

11At the start of the Hearing, the Tribunal sought input from the Parties as to whether the passing of Bill 150, the Planning Statute Law Amendment Act, 2023 which enacts the Official Plan Adjustments Act 2023 (“OPAA”) and received Royal Assent on December 6, 2023, had any impacts on the potential outcome of this matter. It was the joint submission of the Parties and the testimony of the witnesses that there were no impacts. The Tribunal is satisfied that this matter is not impacted by Bill 150.

WITNESSES

12Upon review and consideration of their education, experience, and expertise, as well as their signed Acknowledgment of Expert’s Duty forms, the Tribunal qualified the following witnesses to provide expert opinion evidence:

Called by:	Expert Witness:	Discipline:
Applicant	Edward Newhook	Land Use Planning
City	Michael Fiorino	Land Use Planning
	Gillian Robinson	Application of the Building Code

13The Applicant also called Anthony Girolami as a lay witness to provide factual evidence.

EVIDENCE

On behalf of the Applicant

14Mr. Girolami provided the Tribunal with an overview of the process the Applicant undertook to obtain the necessary building permits to construct the proposed building. He took the Tribunal through the various dates (as generally outlined in paragraph [7] above).

15He stated in his testimony that the Applicant did have as-of-right zoning for a six-storey building; however, there was a requirement for ten minor variances for various things ranging from setbacks to an increase in the first-floor height. These variances were granted by the Committee of Adjustment in the Notice of Decision dated May 26, 2022.

16He highlighted that the demolition permit for 488 Upper Wellington (Permit No. 21-133794-00-DP) (“January Demolition Permit”):

a) was issued prior to the staff review of the Demolition and Salvage Report which was required to be submitted to the satisfaction and approval of the Manager of Heritage and Urban Design prior to demolition; and

b) that no staff member from either the planning department or the building department requested a parkland payment or mentioned one would be required as part of demolition permit issuance.

17He reiterated that when the demolition permit for 500 Upper Wellington (Permit No. 21-164677-00 DP) (“May Demolition Permit”) was issued, there was again no mention by City Staff that a parkland payment would need to be paid or was required for the issuance of a demolition permit.

18Mr. Girolami highlighted that during consultation regarding the building permit to construct a geothermal field (Permit No. 23-111360-00-R3) (“Geothermal Building Permit”), Ms. Robinson, the Building Engineer with the City’s Building Division, advised that payment of development charges and CIL are only required prior to the issuance of building permits which are associated with “Foundation Permits or Full Building Permits.”

19Mr. Girolami concluded that no building permits were issued on or before November 28, 2022.

20It was the overall opinion of Mr. Newhook that:

a) the applicable law for determining parkland dedication is exclusively the Act;

b) in this case, no building permit which satisfies the definition of ‘development’ or ‘redevelopment’ in accordance with the Act was issued before November 28, 2022; and,

c) since the first building permit to satisfy the above definitions was the July 28, 2023, foundation permit, the 10% cap should apply to the CIL of parkland and the Applicant should receive a refund.

21He stated that the Act makes a distinction between demolition and building permits in s.33 and defines ‘development’ in s. 41 as “the construction, erection or placing of one or more buildings or structures on land or the making of an addition or alteration to a building or structure that has the effect of substantially increasing the size or usability thereof ….” He opined that this definition does not encompass demolition.

22Mr. Newhook highlighted that there is no corresponding definition of ‘redevelopment’ in the Act.

23Mr. Newhook stated that the City’s Parkland Dedication By-law gets its authority from the Act, and, therefore, is subordinate to the Act. He pointed to the definitions of development and redevelopment in the Parkland Dedication By-law:

“Development” means the construction, erection, or placing of one or more buildings or structures on land or the making of an addition or alteration to a building or structure that has the effect of substantially increasing the size or usability thereof, or the laying out and establishing of a commercial parking lot.

“Redevelopment” means the removal of a building or structure from land and the further development of the land, the substantial renovation of a building or structure, and a change in the use, character or the density of the use in connection therewith.

24Further, Mr. Newhook identified that the definition of development (in both the Act and Parkland Dedication By-law) speak to increasing the size or usability. He opined that demolition does not fit within the meaning of development. It was his opinion that if the authors had wanted to make conveyance of parkland (in s. 42) a condition of demolition, they could have included it, but instead the authors have chosen not to allude to or include demolition as a trigger for parkland dedication.

25In his testimony, Mr. Newhook stated that the Legislature had been struggling for a while with the cap issue, as the formula to calculate CIL sometimes resulted in an amount of CIL owed that exceeded the value of the land itself. He opined that Bill 23 applied caps to ensure that parkland dedication was not so onerous as to diminish the motivation to develop and intensify the land.

26Mr. Newhook explained that the:

…underlying principle for parkland dedication requirements in the Planning Act is so that there is [an] appropriate amount of park and related facilities for new development and the incremental people who will occupy, work or visit those new developments. Parkland is not required for the demolition of buildings since there is no parkland demand created.

(Exhibit 1, page 15, paragraph 16)

27Mr. Newhook testified that this was the first time in his experience that he had seen a municipality require conveyance of parkland for a demolition, and that it goes against parks planning. He explained that there can be many reasons to demolish that are not related to development. For example, to reduce taxes, as once a building was demolished the assessment would drop and the taxes would go down, or for safety issues, such as a fire which created an imminent safety hazard. He highlighted that there were a great number of reasons to demolish that do not relate to development or redevelopment.

28Returning to the Parkland Dedication By-law, Mr. Newhook stated that it:

…does not support the position that cash-in-lieu of parkland dedication would be triggered by a Demolition permit since the definition of redevelopment contained within the by-law requires both removal of the building or structure and further development of the land. Since a Demolition Permit only permits demolition and does not permit further development, a Demolition Permit by itself does not constitute development nor redevelopment. (Exhibit 1, page 16, paragraph 22)

29It was Mr. Newhook’s position that the Parkland Fee payment should be triggered by the foundation permit and not the demolition permit.

On behalf of the City

30Mr. Fiorino opined that the Site Plan Control application and approval was for lands proposed for redevelopment under the Act. He stated that the two buildings (at 488 and 500 Upper Wellington) “were required to be demolished for the purposes of facilitating the redevelopment.”

31In his testimony, he expanded that this proposal is considered redevelopment as the proposed building creates new units and uses on the site than previously existed on the site. He opined that this proposal has been a redevelopment since the initial application in May 2021.

32Like Mr. Newhook, Mr. Fiorino highlighted the City’s Parkland By-law (By-law No. 22-218) and its definition of redevelopment (found at paragraph [23] of this Decision). It was his opinion that the proposal meets this definition and should be considered a redevelopment.

33Mr. Fiorino noted that it was not part of his duties to discuss parkland dedication with applicants as part of the development review team, nor to provide comments on building permit applications.

34He concluded that the two permits, issued on January 26, 2022 and May 9, 2022, were building permits to facilitate the redevelopment.

35In cross-examination, Mr. Fiorino agreed that demolition alone would not fit the definition of redevelopment but highlighted that demolition as part of the process for the creation of new units or uses would be considered redevelopment. He agreed with Mr. Newhook’s assessment that the objective of s. 42 of the Act was to secure parkland contributions, and that if it was demolition alone without the creation of new units then it would not trigger the need for a parkland contribution.

36Ms. Robinson explained that the building department receives and reviews building permit applications under the Building Code Act (“BCA”). She stated that the building department calculates the applicable fees for a given building permit, in accordance with City By-laws.

37She highlighted that an application for a building permit to construct a building could apply to either a foundation permit alone or a foundation permit together with the superstructure. When this type of building permit (to construct) is received, “that is the only time that the City can calculate the required cash-in-lieu fees for parkland dedication and the development charge fees, for a given development or redevelopment” as they must have the required documentation related to the construction of the building.

38She stated that:

The building department cannot issue the permit to construct a building prior to receipt of the parkland dedication fees. Similarly, under the Planning Act, subsection 42(6.1) prohibits the construction of a building on land proposed for development or redevelopment unless the parkland dedication fee has been made or arrangements for the payment satisfactory to council have been made. (Exhibit 3, page 2, paragraph 13)

39She highlighted that it is typical for lands proposed for development or redevelopment to require several permits and that, in this case, a total of five permits were issued.

40It was her evidence that demolition permits are building permits under the BCA. She highlighted the following sections of the BCA:

Building Code Act, Section 8, Building Permits 8(1) No person shall construct or demolish a building or cause a building to be constructed or demolished unless a permit has been issued therefor by the chief building official.

Building Code Act, Section 1, Definitions "building" means, (a) a structure occupying an area greater than ten square metres consisting of a wall, roof and floor or any of them or a structural system serving the function thereof including all plumbing, works, fixtures and service systems appurtenant thereto, (b) a structure occupying an area of ten square metres or less that contains plumbing, including the plumbing appurtenant thereto, (c) plumbing not located in a structure, (c.1) a sewage system, or (d) structures designated in the building code.

41Ms. Robinson stated that the BCA treats all building permits the same, that demolition is governed by the BCA (as outlined in section 8, quoted at paragraph [40] above), and that the Ontario Building Code also speaks to demolition.

42She highlighted that, in this case, Parkland Fees were not required to be collected for the issuance of the demolition permits. She reiterated that, per the Agreed Statement of Facts, the CIL for Parkland Fees is calculated by the City when an application is received for a building permit for the construction of a new building (either foundation or foundation plus superstructure). She confirmed that is what occurred in this case, which is standard practice.

43In cross-examination, Ms. Robinson confirmed that s. 42 of the Act is applicable law for the determination of CIL for Parkland Fees as identified in s. 1.4.1.3(1)(a)(xxi) of the BCA.

44Ms. Robinson concluded that the permits issued by the building department on January 26, 2022, and May 9, 2022, are building permits.

ANALYSIS AND FINDINGS

45The Tribunal must determine whether the demolition permits are building permits in respect of the development or redevelopment, as required by the Act. It was Mr. Newhook’s evidence that demolition did not fit within the meaning of development or redevelopment. Mr. Fiorino put forward the opinion that demolition as part of the process for the creation of new units or uses would be considered redevelopment.

46Mr. Newhook’s position was that the Act is applicable law for parkland dedication which was confirmed by Ms. Robinson in cross-examination. He then turned to the Parkland Dedication By-law (which gets its authority from the Act) for the definition of redevelopment, as that term was not defined in the Act. As defined at paragraph [23] of this Decision, the Parkland Dedication By-law states:

“Redevelopment” means the removal of a building or structure from land and the further development of the land, the substantial renovation of a building or structure, and a change in the use, character or the density of the use in connection therewith.

47The Tribunal finds that the proposal meets the definition of redevelopment in the Parkland Dedication By-law as two buildings were removed, the land is being further developed, and there is a change in use (from commercial to mixed-use residential/commercial) as well as an increase in density.

48The Tribunal is satisfied that the development proposal in the subject case is redevelopment. As Mr. Fiorino stated, it creates new units and uses on the site, different than what previously existed. In making this finding, the Tribunal applied the guidelines of statutory interpretation, as outlined in Rizzo v Rizzo Shoes Ltd (Re), 1998 CanLii 837 (SCC), [1998] 1 SCR 27, wherein it is stated at paragraph 21:

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

49The Tribunal agrees with the City’s Counsel that the words “in respect of” (a development or redevelopment as stated in the Act), when read in their grammatical and ordinary sense, in the context of these provisions of the Act, mean that the permit in question need only be in some way related to the redevelopment. This is as opposed to “for” a development or redevelopment, which may imply or require a more linear relationship as the Applicant’s Counsel has argued. In other words, in this case, the Tribunal agrees that the demolition permit, which is needed to allow for the buildings to be removed in order to be replaced by a new building, is “in respect” of the redevelopment.

50Thus, the Tribunal was persuaded by the City and its witnesses that the demolition permit was the first step in the redevelopment process and the demolition is to facilitate a six-storey building.

51The Tribunal was also persuaded by the case put forward by the City’s Counsel in support of its position, namely a recent Tribunal case, Centurion (Dundas) Holdings Ltd. v. Hamilton (City) 2024 CanLII 7650 (ON LT). The City’s Counsel submitted that the material facts were almost identical to the current case, with the only difference being the nature of the building permit in dispute. He stated that in that Decision, the Tribunal “ruled that the BCA was relevant to determining what was a building permit, and that the shoring and excavation permit was a building permit”. He argued that in the present case, the Applicant ignored the BCA and produced no persuasive evidence to suggest that a demolition permit is not a building permit.

52The Applicant’s Counsel argued that the Centurion case was clearly distinguishable as it dealt with an excavation and shoring permit rather than a demolition permit. He submitted that excavation and shoring work is necessary to build an underground structure (such as an underground parking garage) which is tied to a development or redevelopment of the site (such as a new building), and that the same does not apply to a demolition permit.

53The Tribunal agrees with the City and finds that, in this case, the demolition is only happening to facilitate the redevelopment of the site. This connection between the demolition and construction was clearly articulated throughout the entire chain of events. Looking at the chronology found in paragraph [7] of this Decision, and as stated in the Agreed Statement of Facts, in the very first Application for Formal Consultation in May 2021, the Applicant’s submission described the proposal as “Proposed demolition of existing structures and construction of a 6-storey mixed use residential building with ground floor commercial ….” [Emphasis added by Tribunal]. Another example is that the Applicant pursued and obtained Site Plan approval while the demolition process was taking place.

54Moreover, in reference to the applications for demolition permits, the Tribunal notes that the permits are titled ‘Building Permit’ (as shown in the images below) and it states in the ‘Description of Work’ section for each that:

Permit No.	Date Issued	Description of Work
Permit No. 21 133794 00 DP	January 26, 2022	To demolish a 790 m², 1-storey commercial building as shown on the attached site plan
Permit No. 21 164677 00 DP	May 9, 2022	To demolish a 1-storey, 1020 m² commercial building as shown on the attached site plan

[Emphasis added by Tribunal]

55There is no dispute regarding the dates these permits were issued, nor any dispute in the language used in the ‘Description of Work’ as both were confirmed in the Agreed Statement of Facts.

56As agreed by the experts, the City issued the Conditional Site Plan Control Approval (DA-22-001) on December 21, 2021. It shows the proposed six-storey building occupying the space where the two original one-storey commercial buildings had been. This clearly shows that the demolition was to facilitate the redevelopment.

57In this case, the Tribunal finds that the demolition is happening because of the redevelopment. The Tribunal does not agree that this situation fits one of Mr. Newhook’s examples where demolition is happening for safety reasons or to reduce taxes, or for another purpose with no imminent redevelopment plans. In this case, the demolition is the first step which enables the redevelopment to proceed.

58The Tribunal accepts Ms. Robinson’s position that the demolition permits are building permits under the BCA.

59The Tribunal is satisfied that the demolition permits, in this specific case, are building permits “in respect of the development or redevelopment”, as required by the Act.

CONCLUSION

60For the reasons above, the Tribunal concludes that, in this case, the demolition permits are building permits in respect of the development or redevelopment as is stipulated in the transition provision in s. 42(3.5) of the Act.

61Demolition permits were issued on January 26, 2022 and May 9, 2022, which were prior to the date when Bill 23 came into force and effect, that being November 28, 2022; as such, the cap on the Parkland Fee does not apply in this case.

62Since no cap is to be applied, there will be no refund owed to the Applicant and no discussion regarding the amount of interest owed is necessary.

ORDER

63THE TRIBUNAL ORDERS that the appeal is dismissed.

“S. Bobka”

S. BOBKA

MEMBER

“Bita M. Rajaee”

BITA M. RAJAEE

MEMBER

Ontario Land Tribunal

Website: www.olt.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248

The Conservation Review Board, the Environmental Review Tribunal, the Local Planning Appeal Tribunal and the Mining and Lands Tribunal are amalgamated and continued as the Ontario Land Tribunal (“Tribunal”). Any reference to the preceding tribunals or the former Ontario Municipal Board is deemed to be a reference to the Tribunal.